Pennsylvania Agrees to Cover Costs for Sharon Hospital for 3 Months

YOUNGSTOWN, Ohio – The commonwealth of Pennsylvania has agreed to cover the costs for Sharon Regional Medical Center for three months, according to a stipulated agreement filed in the U.S. Bankruptcy Court in Houston on Tuesday.

According to the agreement, the commonwealth, through Attorney General Michelle Henry, has agreed to pay Steward Health Care System and Sharon Regional Health System $1.5 million per month from September through November to support the continued operations of the hospital, covering the estimated monthly net cash flow losses.

The first payment will be made Wednesday, with the subsequent payments no later than the sixth day of each month.

If the payments are made, no facility closure notice will be issued.

Steward will continue to provide the commonwealth biweekly cash flow reports, including incoming revenue, payroll figures and monthly financial statements.

The agreement is a step toward transitioning the hospital to Meadville Medical Center or another purchaser by Dec. 1, but if the hospital sale fails to close by that date, a notice of closure will be issued Dec. 2.

The agreement has not yet come before Judge Christopher Lopez, who is presiding over the bankruptcy case. Steward filed for Chapter 11 bankruptcy protection May 6.

Steward also owns Trumbull Regional Medical Center in Warren and Hillside Rehabilitation Hospital in Howland, which are part of a hearing scheduled before Lopez on Tuesday afternoon to address a possible global settlement with Medical Properties Trust, the lease holder on the Steward hospitals. 

In the case of six of the hospitals Steward owns in Massachusetts, MPT was granted rights to operate until a transition could be made to three other hospital groups. The fate of the Ohio hospitals is reportedly linked directly to whether an agreement can be made with MPT.

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